First Person: Living a Six-Figure Lifestyle on a $30,000 Salary
Brian C. Hopkins, On Tuesday May 10, 2011, 6:13 pm EDT*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
Like millions of Americans out there, I like the nicer things in life. I have an affinity for high-end cars, designer clothing, and name-brand home furnishings.
There was a time when I had the six-figure income to afford these things. That was before the crash of what has now become known as the dot-com era. After losing many nice things, I learned that even living at one's means can be a risky proposition. So the challenge became how to continue to live that lifestyle while spending drastically less than I did before.
I wanted to figure out how I could afford these things at a $30,000-a-year salary, just in case I ever had another salary decrease. That planning all paid off when the great recession came. Here's how I learned to have a six-figure lifestyle with a $30,000 yearly budget.
How to Get the Big Home
This one was all about patience, hard work, and discipline. First: New homes are out of the question. They're generally overpriced. I almost bid on a couple of for-sale-by-owner homes, but just couldn't get the right combination of price and neighborhood. I focused on HUD homes and foreclosures, and learned quickly that banks don't want homes on their books. I found a HUD home in a neighborhood with prices averaging above $200,000. My home was more than 60% less than that. It required a bit of work -- I spent a lot of free time on it as a do-it-yourself project -- but in the end I had my nice home. No one knows that I paid less than $80,000 and that I have a monthly mortgage payment of less than $500.
Getting the Car to Match the Lifestyle
I'm a sport and luxury car enthusiast. First I wanted a Mustang, and this was the easiest deal of them all to find. I didn't go to dealers for this one. I went to Craigslist and the classified ads. I know many people will say that this is immoral, but I found a desperate seller who was willing to almost give the car to me because his notes were too high. I was happy, and he was happy to be rid of it. A simple refinancing and I had a car note for less than $150 per month. Not long after that I decided that I wanted a Lexus, and I did go through a dealer to get that one. I got a great deal on a used Lexus (I no longer buy new cars). Here's how I saved about $5,000 on that deal.
I Love Movado Watches
Anyone who knows me knows that I love Movado watches and will rarely, if ever, wear anything else. At a $30,000-a-year salary, I certainly can't afford to shell out $1,000 or $2,000 on a watch. So I had to find a new source. I began scouring Craigslist, eBay, and pawn shops for good deals on watches. I found three Movado watches that were used and paid less than $500 total for all three of them. I recently sold one of these watches on eBay for $600. I now wear watches valued at more than $800 each, and I basically paid nothing for them.
Got to Have My Designer Clothes
I am an avid wearer of brands such as Ralph Lauren, Armani, Perry Ellis, and Gucci. Jackets for these brands can run from $300 to $3,000 dollars, so there's no way I can afford these on a $30,000 salary. I had to really swallow my pride and begin browsing through eBay for good deals on used items. A few of you may say there's no way you'd wear used clothing, but I say one trip to the cleaners, and they're as good as new. I found that even better deals can be found at consignment shops and Goodwill stores. At one Goodwill store, I found an Armani jacket for only $15, and I get constant compliments on it.
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2,945 comments
0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentA Yahoo! User 45 seconds ago Report AbuseI completely agree with him on the house and cars. My husband and I bought a foreclosed house for much lower than the average price in the neighborhood. Yes, it is a lot of work to fix up, but the work itself gives us a sense of satisfaction, on top of the fact that we know we are saving a ton of money. My car was a two-year old certified Honda when I bought it. I have taken good care of it and still drive it 7 years later, with over 120k miles on it (still just a baby for a Honda).
As for the expensive clothes and watches, I can't really understand why people think they need those things anyway, but at least you can try to get the best possible deal on them if you think they will make you happy. Personally, I have an issue where only expensive jeans will fit me (okay, not super-expensive, but I'm talking Express or American Eagle, around $75 a pair -- expensive for what I make). I go to the resale shop to buy my jeans. Some still have the price tag on them, and I pay 10 or 15 bucks a pair.
Bottom line -- you certainly need a home and a car and some clothes to wear, but I've found that the less junk you have in your life, the more room you have for living. Give away 10% of your possessions to the less fortunate and you will start to feel liberated. A Coach purse is really just a sign that you carry around that says "Pay attention to me, I'm someone important". Live in such a way that you don't need to carry the sign around. Works for me, I have plenty of friends even though my entire wardrobe probably cost less than $200.
I think this is a positive way of making due with less and we can all learn from that.
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Wednesday, May 11, 2011
First Person: Living a Six-Figure Lifestyle on a $30,000 Salary - Yahoo! Finance
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